A Split In The Spliff Industry: Can Big Marijuana Survive Without Roger Stone?

By Alex Halperin // September 19, 2017

Enter “boastful black prince of Republican sleaze” into Google, and all the top results will be for Roger Stone. He’s had a hand in sordid incidents from Watergate through the Trump administration’s Russia morass. But last week the 65-year-old political consultant was in Los Angeles to promote one of his longtime pet causes: marijuana legalization.

Stone issued a rare apology, but when the conference didn’t take him back he came to L.A. and spoke anyway. “I’m prepared to work with anybody who wants to legalize cannabis,” he said this past Friday, to an audience of a few dozen curiosity seekers and conspiracy theorists, at a pot-friendly lounge downtown, while green rushers swarmed the convention center. Calling the war on drugs an “expensive racist failure” and a “bipartisan policy disaster,” he spoke as a representative of a group called the United States Cannabis Coalition. An organization, he said, that will soon launch a television ad campaign in favor of legalization. Stone’s message for the president: “If you want to make America great again, legalize cannabis.”

“You may not like me, you may not like my politics,” Stone said, “but you can’t [legalize] without Republicans.”

Until the recent boycott, the cannabis industry has kept its distance from partisan politics. While 30 states have legalized medical or recreational marijuana, it remains federally illegal. In theory, this means the president could crush it on a whim.

It was unusually warm for late September, but Buddie didn't seem to mind.

As the mascot for a plan to legalize marijuana in Ohio, Buddie has a superhero’s physique, a green bumpy head, and a winning smile. Despite the heat, the woman on Buddie duty stood in the Oval, the center of academic life at Ohio State, and posed for selfies with students, as campaign workers registered young Buckeyes to vote.

An operative named Nick Kish asked two giggly students if they’d heard of ResponsibleOhio, the political action committee behind a campaign that would deliver legal pot to the Midwest and a windfall to the investors funding it. Have they heard good things? Bad things? A bit of both.

"All the negative you’ve heard centers around us being a proposed monopoly, right?" Kish asked, then offered a perspective that anyone involved in Colorado’s legal marijuana industry would consider wildly misleading.

Earlier this year, Dixie Elixirs & Edibles, perhaps Colorado’s best-known cannabis brand, took its THC-infused drinks off the market. It had no choice.

That's because a couple of weeks later, on February 1, new packaging regulations for recreational marijuana edibles went into effect in the state and the screw top aluminum bottles were no longer compliant.

The new rules require that drinkable cannabis products come in childproof, resealable packaging. Dixie also had to come with a way to measure out a single dose, like the tiny plastic cup on a bottle of cough syrup.

Dixie enlisted a Colorado packaging company called TricorBraun to design a new bottle that met all the specs, but by the time the new bottles reached dispensary shelves last week, the company had lost 90 days of selling its flagship product.

Oakland-based Auntie Dolores is a well-known brand in the country’s biggest legal cannabis state. The company has been making cannabis-infused edibles, like brownies and pretzels, for California’s medical marijuana users since 2008. Its products, which include gluten-free and vegan options, can be found in 150 dispensaries around the state.

But running a cannabis business in a California can be a very difficult balancing act. "Our laws are just so out of date in terms of how the industry has evolved," says CEO Julianna Carella, a former professional dancer. The system it established "doesn't work in an environment that has this many dispensaries and this many patients."

n 1996, California became the first state to sanction medical marijuana and in 2013 annual sales approached $1 billion, according to a report by ArcView Market Research, making it the country’s largest legal cannabis market. But industry executives complain that the Golden State has yet to implement the kind of statewide regulatory framework that would give clear guidelines to a business like Auntie Dolores.

Regulation Is Squeezing Out Potrepreneurs, Clearing the Road For Big Cannabis

by Alex Halperin // November 21, 2014

For Julie Dooley, marijuana is a business and a cause.

A 46-year-old mother of three, Dooley is the cofounder and president of Julie’s Baked Goods, a purveyor of cannabis-infused snacks. She has celiac disease and wanted to create gluten-free products that would relieve her pain without damaging her intestine. Dooley’s Denver company released its first product, granola mixed with cranberries and almonds, in 2010 and now sells about 6,000 units a month, employing 11 people.

Even in Colorado, where medical and recreational marijuana are both legal, the cannabis business involves its share of hassles. Initially, Dooley’s license cost $1,250 and required a 25-page application. Renewing it, she said, cost more than twice that and required investing about $25,000 in the company’s kitchen, including a security system with 24-hour video surveillance. She wouldn’t have a business today if her husband weren’t a manufacturing specialist, she says.

As hard as she’s worked, Dooley’s experience has been relatively easy for a medical marijuana business in this country. Marijuana remains illegal federally, which leaves every state which allows the product to figure out its own regulations. Colorado was one of the first states to legalize recreational marijuana, and its regulations help ensure that cannabis companies have to pay close attention to the regulatory landscape to ensure they’re in step with the law. "I know every city councilman," Dooley said. "I don’t want to."

One morning in September, the 16 editors working on the reality show Shahs of Sunset picked up their belongings and left their office in downtown Los Angeles. They were going on strike.

Hollywood remains a stronghold of private sector unions but for much of its short history, reality television has been an exception. Initially, many reality show crew members were young and came from the documentary world, said Vanessa Holtgrewe of the International Alliance of Theatrical Stage Employees (IATSE).

Now IATSE is pushing to bring more of the reality workforce into the union fold. "Reality crews don't work any less hard," Holtgrewe said. "They don't get any less sick. They don't have any less children than folks work on features and television shows. There's no one visible separating line there for us."

Maestro Of The Midwest: For The Future Of American Eating, Look To Columbus

by Alex Halperin // December 22, 2014

No great rock bands come from Columbus, Ohio, says Cameron Mitchell, the city’s most celebrated restaurateur. Mitchell has built his empire by understanding his hometown’s safe distance from the cutting edge.

"We don’t have any preconceived notions. Maybe if you’re on the coasts you already think you’re cool, you already think you know everything." Mitchell says. "We don’t want to be so avant-garde or so hot that we alienate people. We have to, by our nature, appeal to the masses."

As a hub of national restaurant and fashion brands, Columbus has developed a civic specialty in absorbing coastal excesses and distilling them into mass product. For decades, Ohio’s capital has also been known as a test market where restaurant pros audition new products before rolling them out nationwide. The tastebuds of the city’s students and harried families stand in for those of the nation.

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Live From Vegas: The Biggest Marijuana Business Conference Ever

by Alex Halperin // November 14, 2014

I got a drink from a bar that was lit up green, the color of money, and went to meet Jane West.

West was hosting a party the presidential suite at the Rio hotel and casino in Las Vegas during this week’s National Marijuana Business Conference. The 38-year-old mother of two got started in the Colorado cannabis scene by organizing events where guests got high amidst food, art, and music. She lost her job putting together enrichment programs for promising young people a few months later after CNBC did a story of her. She has since launched herself into the life of an entrepreneur and industry gadfly.

The name Jane West is even part of her "midlife awakening." "I’m not just branding cannabis, I’m rebranding Amy Dannemiller"—her real name—"into this fucking awesome party thrower." Her company, Edible Events, organized a series of fundraiser concerts for the Colorado Symphony called "Classically Cannibis: The High Note Series." Another event featured a functional bong sculpted out of ice.

Last July, thousands of investors and Silicon Valley watchers received an email about a mobile app that is trying to become the "Uber of shipping." Shyp users snap a picture of the item they want mailed, and a courier—the company calls them "heroes"—arrives to carry it away. The cargo gets packed at a warehouse and sent by U.S. Postal Service, or a private competitor like UPS.

The email, which included a link to Shyp's slide presentation, explained the business model: offering reasonable prices by getting volume discounts from shippers. (In a juicy aside, the email mentions that shippers give Amazon a 90% discount.) As a result, it says Shyp generates a 20% to 50% gross profit per pick-up. The founders were looking to raise $500,000 in debt financing.

There are scads of companies right now calling themselves the "Uber of" some industry or another. And nothing in the LinkedIn profiles of Shyp's founders, two Canadian engineers who met at another San Francisco startup the year before, would stand out to an investor. Most companies with this profile might wind up at a pitch-fest, or perhaps land a spot at an incubator. A lucky few might land an elevator pitch meeting with venture capitalists.